The crypto futures market was relatively active today as over $1 billion worth of longs were liquidated from various trading platforms. The liquidation came as many traders jumped into late longs after Bitcoin broke $60,000.
The cryptocurrency market has been in an uptrend since late last year and several investors took advantage of it to earn more profits from the market.
A derivatives long position means a trader is betting on the increase of the underlying asset’s price. Derivatives allow users to take on cheap leverage without having to pay interest on margin, in addition to having access to much higher leverage – Binance offers 125x. Such high leverage is of course “unwise” to use for the vast majority of users as volatility will cause almost definite liquidations.
$1.5 Billion Liquidated
As Bitcoin’s price rallied past $60,000 and the remainder of the market followed suit, it appears that some traders entered late over-levered longs. Liquidations were triggered across exchanges and led to $1.5 Billion worth of positions to be liquidated.
Binance by far had the most liquidations and accounted for more than half of the liquidations while only having 38.5% of the total volume – that likely speaks of their liquidation engine being “harsher” than others.